Energy, Enviro Spending at Heart of Looming Budget Fight

Published: February 14, 2011

As the White House prepares to unveil its 2012 budget proposal today, battle lines are forming for a high-stakes House-Senate clash over the next 18 months of federal spending that could carry significant consequences for energy and environmental programs.

As the Obama administration rolls out its plans for the next fiscal year, pitching a five-year discretionary spending freeze as well as more money for an "innovation" agenda that includes clean energy research, the House GOP will take up an alternative vision aimed at slashing spending -- and with it, the trillion-dollar federal debt. The chasm between those two fiscal agendas is set to dominate the week and perhaps the season, with a particular focus on U.S. EPA and the Energy Department.

"I guarantee you, there'll be cuts in these appropriations bills that nobody will like," Rep. Mike Simpson (R-Idaho), chairman of the House Appropriations subpanel in charge of the EPA and the Interior Department, said Thursday of the two-part spending tussle to come.

Simpson and other senior Republicans in the chamber agreed to greater slashes in federal spending for the remainder of the current fiscal year after House conservatives chafed at the party's initial failure to fulfill its campaign-trail promise of $100 billion in cuts.

The continuing resolution (CR) expected on the House floor tomorrow meets that promise -- when compared to a presidential budget request for 2011 that was never enacted. In real terms, the proposed House cuts amount to about $60 billion relative to existing spending.

Even so, the GOP's plans -- including a cut of more than one-third to DOE's efficiency and renewables program -- mark a stark contrast to a new White House budget proposal that would give the department $8 billion for clean energy technology (see related story). Under the Republican plan, EPA would see a $3 billion cut, nearly twice as big a slice as first aimed at the agency, along with language stopping it from implementing greenhouse gas emissions rules that are bitterly opposed by the GOP.

The wild card in the resulting political battle may be the Senate Democratic caucus. Its leaders do not question the goal of spending trims, particularly given the number of deficit-weary centrists in their ranks, but are dug in against a House GOP majority they say is ready to cause a government shutdown in order to exact the largest possible cuts.

"We're willing to meet Republicans in the middle on spending, but they keep lurching to the right," Schumer told reporters, adding: "This is what happens when you pick a number first and figure out the cuts later."

House Majority Leader Eric Cantor (R-Va.) fired back in a National Review op-ed circulated by his office that charged Senate leaders with fomenting "a fear campaign" about a shutdown that was "akin to shouting fire in a crowded theater." House Democrats joined the scrum with a memo blasting the GOP for proposing to cut research positions at the National Science Foundation by 20,000.

Defending EPA

A summary of the House CR released by Appropriations Chairman Hal Rogers (R-Ky.) summed up the punch of his party's broadside at White House environmental priorities: "The cuts to the EPA alone represent 69 percent of the bill's reduction compared to last year's level."

Indeed, the House CR would zero out funding for an array of both big and small agency priorities. Competitive grants for local land-use planning, the White House energy and climate adviser's office, attempts to change the definition of "navigable waters" in the Clean Water Act, and even a $500,000 earmark for a new EPA green building in Reid's home state of Nevada would all be blocked under the GOP measure.

But the most charged move of all was House Republicans' bid to bar EPA from spending money on its greenhouse gas regulations. Simpson said Friday that Republicans are not likely to risk a government shutdown over the emissions rules, particularly when the House Energy and Commerce Committee is in the throes of crafting a broader bill to revoke EPA's authority over greenhouse gases (E&ENews PM, Feb. 11).

And if the House GOP attempted to press its case on defunding the EPA emissions rule, it would run into a wall of Senate opposition. Asked by E&E Daily on Friday if a CR "rider" blocking the greenhouse gas limits would have any traction in the upper chamber, Reid replied, "About like 20 degrees below zero, trying to walk across an icy pond."

Overall, the Senate Democratic leader described the White House's five-year spending freeze as a starting point for accord with Republicans, but most in the GOP consider the proposal's estimated savings of $400 billion over 10 years as insufficient.

Reid also said his chamber is open to considering a plan first pushed last year by Sens. Claire McCaskill (D-Mo.) and Jeff Sessions (R-Ala.) that would cap annual increases in non-defense discretionary spending to between 1 percent and 2 percent. The McCaskill-Sessions measure, which Reid acknowledged could win 60 votes this year, would limit spending in 2011 to $1.108 trillion, in 2012 to $1.121 trillion and in 2013 to about $1.139 trillion (E&E Daily, Sept. 15, 2010).

The battle over those competing plans to cut spending while aiding the economy begins in earnest this week.